Shumlin proposes tax on Vermont Yankee to finance global warming legislation

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(Host) Senate President Peter Shumlin is proposing a “windfall profits tax” on the operations of the Vermont Yankee nuclear power plant to finance global warming legislation at the State House.

Governor Jim Douglas says he wants to study the plan in the coming days.

VPR’s Bob Kinzel reports:

(Kinzel) Shumlin says it’s critical for the state to act now on the global warming initiative. The overall plan calls for an expansion of energy efficiency programs to help Vermonters reduce their use of fossil fuels.

Originally the Senate’s global warming bill was financed using a new 1% tax on the wholesale price of heating oil but the tax encountered a lot of opposition and was dropped.

Shumlin says it’s fair to levy a new tax on Vermont Yankee because it’s clear that the federal government won’t be building a national nuclear waste storage facility for many years to come – this means these wastes will have to be stored on site at the Vernon facility.

He also says the tax is appropriate because the owner of the plant, Entergy, has recorded huge unexpected profits in the last two years because oil prices have surged:

(Shumlin) “Bottom line is what we’re proposing is that we tax for the privilege of storing wastes on our river and from the revenue of this windfall that I’ve just described to you. We all know that Exxon Mobil has enjoyed windfalls recently, that BP has enjoyed windfalls. Now we know that Entergy’s enjoyed windfalls that have nothing to do with their management practices, nothing to do with the assumptions that were made the last time this was discussed in the Legislature.”

(Kinzel) Under this legislation, Entergy would pay $2 million this year, $5 million in 2008 and an extra $2 million every year until 2012, when the Vermont Yankee license expires.

Shumlin urged Governor Douglas to support the plan:

(Shumlin) “You got to do the policy if you’re going to make a difference. So I challenge him to come up to the plate and support us in this and I think his reaction to this will tell the story about whether Jim Douglas is serious about global warming or whether Jim Douglas simply wants to talk the talk.”

(Kinzel) Douglas says he wants to see the details of the bill before he makes a final judgement about it.

(Douglas) “There is a fixed rate built into the contract with Vermont Yankee for the foreseeable future. So at least in the near term it wouldn’t have an impact on ratepayers. An important consideration is what kind of new bureaucracy is going to be built in this proposed fuel efficiency program. So I need to understand what the proposal is and what it’s going to fund.”

(Kinzel) Entergy spokesperson Brian Cosgrove says the tax is unfair. He notes that lawmakers imposed an annual $4.5 million dollar tax on Vermont Yankee in 2005 to allow the facility to store wastes on site. Now Cosgrove says the Senate is trying to add a second tax to the wastes.

(Cosgrove) “I think the real problem with that is that it sends a message to us and to other people that want to come into Vermont to do business and create jobs that in Vermont a deal is never a deal.”

(Kinzel) The Senate Finance committee will review the legislation this week.

For VPR News I’m Bob Kinzel in Montpelier

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